Natural gas benchmark price for January 2024 drops (finally!)

Even if it is a theoretical price, it is good news that is emerging. The benchmark sales price for natural gas published by the Energy Regulatory Commission (CRE) for the month of January 2024 decreases by 3.46 euros per MWh. “The average benchmark price thus amounts to 92.76 euros per MWh,” summarizes the CRE.

Formally, gas supply contracts at the regulated sales rate (TRVG) ended on June 30, 2023. But these rates remain a reference index for many contracts. First of all for Engie customers who benefited from a TRVG offer and who have not changed it. Their contract was automatically transformed into a “changeover offer”. Around 2 million households are affected. Alternative suppliers also market market offers at prices indexed to this reference price. Their price changes relative to the supply cost reference scale or the sales benchmark price, both published by the CRE.

“This benchmark price for the sale of natural gas is of an indicative nature,” underlines the CRE. Suppliers establish their offers based on their supply conditions, commercial choices, etc. “Thus, for example, the price of a fixed price offer over one year is likely to differ significantly from the reference price of the CRE which reflects monthly and quarterly variations in the price of gas,” adds the regulator. Please note, the amount of the annual subscription remains unchanged. It is, for example, 257.18 euros including tax for “heating” type subscribers in the GRDF zone.

The drop in gas prices is certainly good news, but even so they remain substantially higher than before the crisis. French consumers were protected from soaring gas prices in 2022 and early 2023 by the implementation of the price shield. This was removed in the spring, prices having fallen below the level of the shield. But the CRE benchmark price for January 2024 is 70% higher than that of January 2020.

The decline is therefore entirely relative for individuals. It is nevertheless very real for companies which did not benefit from this shield and were directly exposed to the surge in prices, with prices quadrupling between January 2020 and September/October 2022, at the peak of the crisis. But as the colder months approach, European and French gas stocks are at their highest. Russian gas imports have been massively replaced by imports of liquefied natural gas (LNG), particularly from the United States and Qatar.

France has acquired an additional unit to reliquefy this gas with a ship anchored in Le Havre (FSRU) and operated by TotalEnergie. This unit was added to France's existing capabilities. Germany, which did not have regasification units, set up three FSRUs, also helping to ease the price of gas in Europe. Winter should therefore go well, at least within the countries of the European Union.